RCS MediaGroup FY Results Milano, 19 Marzo, 2015
Agenda Highlights Market & Business Trends FY Results Outlook and Strategic Opportunities Business Units Back up 2
Delivery Report Profitability Ebitda margin increase for all BUs Efficiencies Above FY14 enhanced target of 70M Cash Flow Operating Cash Flow back to positive with an improvement of 85M vs Advertising Group advertising revenue: +3% YoY Media Spain: +7% YoY Media Italy: -6 % YoY Digital 13% of total revenue (15% excluding books) Digital Subscriptions double-digit growth (Corriere +25%) 3
FY Results EUR million Targets REVENUE 1,279 Flat on LFL basis In line EFFICIENCIES 72 70 Better EBITDA ex non recurring items 70 ~3x 2.6x Non recurring items (40) (40) In line NFD 483 Below 500M excluding disposals Better 4
Focus on Q4 & Q1 2015 initiatives MEDIA ITALY NEWS Successful new tabloid format Corriere, following new DE and new corriere.it Increased online videos and webseries Launch of new Abitare magazine and revamp of Life Style and Travel magazines through strong new editors SPORT Successful new Gazzetta System (GazzaGold app, restyling print edition) Encouraging launch of Gazzetta TV channel 59 on DTT GazzaBet reached over 15k registered users (end of ) ADV & SPORT EVENTS ADVERTISING New adv organization: RCS Communication Solutions New BTL agency NuMix Profiling & data monetization (Madai, Blurum partnerships) SPORT EVENTS Growth of International sport events (Dubai and Abu Dhabi Tour) New mass events formats (Electric Run, We Glow) MEDIA SPAIN NEWS El Mundo new microvideo and mobile journalism Expansión.com new web-site launch Expansión Mexico edition launch Telva new digital project and contextual e-commerce model SPORT Marca.com new video platform with improved In app video Discovery Awards organized by Last Lap BOOKS Successful Q1 titles Eco, Houellebecq, Piketty, Rovelli and Arango New Rizzoli Galleria bookstore in Milan successful results MyStudio edu-platform Strenghtened offer in Education for 2015 5
FY - Digital revenue % of revenue +% increase FY/FY RCS GROUP 12.6% +8.7% vs ITALY 15.1% +3.5% vs (1) BOOKS (2) 4.7% +32.0% vs SPAIN 14.1% +14.9% vs 6 (1) Italy excluding books (2) % on trade books
Agenda Highlights Market & Business Trends FY Results Outlook and Strategic Opportunities Business Units Back up 7
Italy: Advertising Trends Advertising Gross Revenue, EUR million -2.5% 6,359 6,201 465 79 475 353 82 347 529 495 (%) Market -2.5% Online (1) +2.1% Outdoor +3.2% Radio -1.8% Magazines - 6.5% (%) / - 2.2% -7.2% (%) 4Q14/4Q13-10.7% -11.1% 898 811 Newspapers -9.7% -5.4% -7.0% 3,527 3,510 TV - 0.5% 509 483 Other (2) -5.2% 8 TOTAL MARKET (1) Excluding Search Adv (2) Including: Cinema, Direct Mail,Transit, Out of home TV (3) RCS advertising house excluding third party Source: Nielsen Media Research RCS (3)
Spain: Advertising Trends Advertising Gross Revenue, EUR million 3,589 19 281 369 349 286 621 +5.0% 3,769 21 291 387 360 281 614 (%) Market +5.0% Cinema +9.8% Outdoor +3.4% Online +5.0% Radio +3.2% Magazines -1.9% Newspapers -1.1% (%) / +12.7% -0.7% +2.2% +9.3 % (%) 4Q14/4Q13 +20.2% - 0.3% +11.5% +29.7% 1,664 1,816 TV +9.1% TOTAL MARKET RCS 9 Source: Arce Media
Italy: Newspaper Circulation Trends Circulation, copies/000 per day MARKET ++ -8.2% ex. Financial Daily RCS National Newspapers (1) -3.6% -7.7% 1,979 1,908-5.5% 488 461 101 +25% 126 Digital 387 335 Sports Newspapers 474-9.4% 430-7.0% -1.4% 280 276 41 +32% 54 239 222 Digital 10 (1) Includes newspapers with circulation > 90,000 copies Source: ADS + Internal Estimates (digital copies included)
Italy: Online Readership Workday Unique Browsers +4% ++ QoQ Million Users Monthly Unique Browsers +6.9% 34.7-1.0% 34.4 2.0 2.4 2.3 2012 ++ +42% QoQ +15.5% 1.0 +14.6% 1.1 1.3 14.4 16.6 2012 11 Source: Nielsen Online SiteCensus- Adobe Sitecatalyst
Spain: Newspapers Circulation Trends Circulation, copies/000 per day Generalist Newspapers 1,107 (1) MARKET RCS (2) -8.7% ++ ++ -8.2% QoQ QoQ -9.2% -10.3% 1,005 201 181 29 +6% 31 Digital 173 150 Sports Newspapers 478-7.2% 443-8.9% ++ QoQ -3.7% 189 182 7 +32% 9 181 172-5.7% ++ QoQ Digital Financial Newspapers 61-6.0% 58-2.5% ++ QoQ 40 10 30 +3.3% +29% +4.2% ++ QoQ 41 29 12 Digital 12 Sources: OJD (1) Includes newspapers with circulation > 80,000 copies (2) Digital editions included (2)
Spain: Online Readership Million Users Weekly Unique Browsers 2.1 +6.0% 2.2 +24% ++ QoQ 3.7 +8.6% 4.0 0.3 +20.2% 0.4 Monthly Unique Browsers +6.3% 30.8 32.8 ++ +19% QoQ 35.0 +6.3% 37.3 5.3 +21.4% 6.5 13 Source: Omniture
Books: RCS Trade vs Market TOTAL MARKET (EUR million) 1,100.1-2.7% 1,070.7 +RC+ RCS +4.8% RCS MARKET SHARE +0.8 pp 11.0% 11.8% TOTAL MARKET (Millions of copies) 92.0-5.3% 87.2 +RC+ RCS +3.2% +0.9 pp 9.8% 10.7% 14 Source: GFK
Agenda Highlights Market & Business Trends FY Results Outlook and Strategic Opportunities Business Units Back up 15
FY Results - Summary EUR million (1) (1) 4Q14 4Q13 % % Total Revenue 357.8 10 0 % 349.2 10 0 % 2.5% 1,279.4 10 0 % 1,314.1 10 0 % (2.6%) Circulation 173.5 181.6 (4.5%) 658.5 719.9 (8.5%) Advertising 149.8 138.1 8.5% 491.2 476.1 3.2% Other 34.5 29.5 1 6.9% 129.7 118.1 9.8% EBITD A ex NR Items 56.5 15.8 % 48.1 13.8 % >100% 70.1 5.5% 27.1 2.1% ns Non Recurring Items (10.1) (10.2) (40.1) (110.5) EBITD A 46.4 13.0 % 37.9 10.9 % ns 30.0 2.3 % (83.4) ( 6.3 %) ns EBIT 15.8 4.4 % (23.2) (53.5) (201.2) Net Result (17.7) ( 4.9 %) (43.2) ( 12.4 %) (110.8) (218.5) NFP (482.5) (474.3) 16 (1) Q413 and figures were restated further to the adoption of the amendment to IFRS 10 and IFRS 11 related to the perimeter of consolidation. Additionally, these figures were modified to reflect the application of IFR5 to the value of the Group s shareholding in IGP and Finelco Group, for which a divestment is highly probable. The Partworks Division were sold on August 1,. On December 11, the equity investment in Editions d Art Albert Skira was sold and on March 1, the line of business La Tribuna was sold.
FY Results Profit & Loss EUR million (1) (1) 4Q14 4Q13 % Circulation 173.5 48.5% 181.6 52.0% 658.5 51.5% 719.9 54.8% (8.5%) Advertising 149.8 41.9% 138.1 39.5% 491.2 38.4% 476.1 36.2% 3.2% Other 34.5 9.6% 29.5 8.4% 129.7 10.1% 118.1 9.0% 9.8% TOTAL REVEN U E 357.8 100% 349.2 100% 1,279.4 100% 1,314.1 100% ( 2. 6%) 17 Operating costs (ex non recurring costs) (217.4) (60.8%) (219.5) (62.9%) (881.5) (68.9%) (928.8) (70.7%) (5.1%) Labour costs (ex non recurring costs) (75.2) (21.0%) (73.9) (21.2%) (306.0) (23.9%) (332.7) (25.3%) (8.0%) Writedowns (4.0) (1.1%) (4.2) (1.2%) (14.4) (1.1%) (18.1) (1.4%) (20.4%) Provisions (4.7) (1.3%) (3.5) (1.0%) (7.4) (0.6%) (7.4) (0.6%) 0.0% EBITDA ex Non Recurring Items 56.5 15.8% 48.1 13.8% 70.1 5.5% 27.1 2.1% >100% Non Recurring Items (10.1) (2.8%) (10.2) (2.9%) (40.1) (3.1%) (110.5) (8.4%) ns EBITDA 46.4 13.0% 37.9 10.9% 30.0 2.3% (83.4) (6.3%) ns D&A (17.7) (4.9%) (17.0) (4.9%) (61.8) (4.8%) (69.8) (5.3%) Impairment writeoffs (12.9) (3.6%) (44.1) (12.6%) (21.7) (1.7%) (48.0) (3.7%) EBIT 15.8 4.4% (23.2) (6.6%) (53.5) (4.2%) (201.2) (15.3%) Net financial incomes (charges) (10.4) (2.9%) (12.9) (3.7%) (41.4) (3.2%) (32.7) (2.5%) Gain (losses) on financial assets/liabilities (0.5) (0.1%) 1.9 0.5% (2.3) (0.2%) 0.7 0.1% Income (charges) from equity investments 0.5 0.1% (3.0) (0.9%) (1.4) (0.1%) (2.5) (0.2%) PRE-TAX RESULT 5.4 1.5% (37.2) (10.7%) (98.6) (7.7%) (235.7) (17.9%) Taxes (6.5) (1.8%) (10.2) (2.9%) 4.3 0.3% 28.5 2.2% Net Result from Discontinuing and Discontinued Op. (15.7) (4.4%) 4.4 1.3% (16.1) -1.3% (11.6) (0.9%) Minorities (0.9) (0.3%) (0.2) (0.1%) (0.4) (0.0%) 0.3 0.0% NET RESULT (17.7) (4.9%) (43.2) (12.4%) (110.8) (8.7%) (218.5) (16.6%) (1) Q413 and figures were restated further to the adoption of the amendment to IFRS 10 and IFRS 11 related to the perimeter of consolidation. Additionally, these figures were modified to reflect the application of IFR5 to the value of the Group s shareholding in IGP and Finelco Group, for which a divestment is highly probable. The Partworks Division were sold on August 1,. On December 11, the equity investment in Editions d Art Albert Skira was sold and on March 1, the line of business La Tribuna was sold.
(1) - EBITDA evolution by quarter EUR million 6 consecutive quarters of improvements -33 18-9 11 1 +7 8 +10 38 48 +10 +14 11 25 8 +10 18 48 +9 57-6 -39-39 -29 2012 2012 2012 2012 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 18 (1) EBITDA before non recurring costs figures were restated further to the adoption of the amendment to IFRS 10 and IFRS 11 related to the perimeter of consolidation.
Q4 and FY Results Breakdown Revenue & Ebitda EUR million (1) Revenue EBITDA Ex Non Recurring Items Q4 Q4 Ebitda ex NR % EBITDA Ebitda% Revenue EBITDA Ex Non Recurring Items Ebitda ex NR % EBITDA Ebitda% Media Italy 147.6 34.0 23.0% 32.0 21.7% 146.7 28.3 19.3% 26.2 17.9% Media Spain 101.0 22.1 21.9% 21.0 20.8% 98.4 14.6 14.8% 11.5 11.7% Books 67.2 5.2 7.7% 0.8 1.2% 71.8 8.0 11.1% 8.6 12.0% Advertising & Events 93.7 1.4 1.5% 1.1 1.2% 91.7 (1.8) (2.0%) (4.6) (5.0%) Corporate Activities 22.3 (6.2) (27.8%) (8.5) (38.1%) 21.7 (1.0) (4.6%) (3.8) (17.5%) Others and eliminations (74.0) 0.0 0.0% 0.0 0.0% (81.1) 0.0 0.0% 0.0 0.0% TOTAL RCS 357.8 56.5 15.8% 46.4 13.0% 349.2 48.1 13.8% 37.9 10.9% FY FY (1) Revenue EBITDA Ex Non Recurring Items Ebitda ex NR % EBITDA Ebitda% Revenue EBITDA Ex Non Recurring Items Ebitda ex NR % EBITDA Ebitda% (1) Q413 and figures were restated further to the adoption of the amendment to IFRS 10 and IFRS 11 related to the perimeter of consolidation. Additionally, these figures were modified to reflect the application of IFR5 to the value of the Group s shareholding in IGP and Finelco Group, for which a divestment is highly probable. The Partworks Division were sold on August 1,. On December 11, the equity investment in Editions d Art Albert Skira was sold and on March 1, the line of business La Tribuna was sold. 19 Media Italy 531.9 61.5 11.6% 60.1 11.3% 557.0 38.9 7.0% (21.0) (3.8%) Media Spain 358.1 27.3 7.6% (0.5) (0.1%) 371.7 7.0 1.9% (11.0) (3.0%) Books 222.6 9.3 4.2% 2.0 0.9% 251.1 8.8 3.5% 3.8 1.5% Advertising & Events 345.5 (0.6) (0.2%) (1.7) (0.5%) 330.4 (13.6) (4.1%) (31.6) (9.6%) Corporate Activities 78.0 (27.4) (35.1%) (29.9) (38.3%) 78.5 (14.0) (17.8%) (23.6) (30.1%) Others and eliminations (256.7) (274.6) TOTAL RCS LfL 1,279.4 70.1 5.5% 30.0 2.3% 1,314.1 27.1 2.1% (83.4) (6.3%) Assets held for sale or sold 39.7 4.1 4.1 Others and eliminations TOTAL RCS 1,279.4 70.1 5.5% 30.0 2.3% 1,353.8 31.2 2.3% (79.3) (5.9%)
Efficiency program EUR million 164M achieved in two years vs 144M original three-year target In line with high end guidance of 220M by end 2015 72 ~164 26 92 46 Spain 43 Italy 49-20
Balance Sheet EUR million 31/12/ 31/12/ Net fixed assets 878.2 116.2% 962.2 118.9% Tangible & Intangible fixed assets 652.4 86.4% 666.8 82.4% Financial fixed assets 225.8 29.9% 295.4 36.5% Net working capital 53.4 7.1% 87.7 10.8% Reserve for risk and charges (159.3) (21.1%) (209.5) (25.9%) Employee termination indemnity (53.7) (7.1%) (51.3) (6.3%) Net invested capital: assets held for sale 36.9 4.9% 20.1 2.5% (1) CAPITAL EMPLOYED 755.5 100.0% 809.2 100.0% Net financial debt (cash) 482.5 63.9% 474.3 58.6% Equity 273.0 36.1% 334.9 41.4% EQUITY & NFP 755.5 100.0% 809.2 100.0% 21 (1) Figures as of 31December were restated further to the adoption of the amendment to IFRS 10 and IFRS 11 related to the perimeter of Consolidation.
Net Financial Position at the end of December EUR million NFP 31/12/12 (1) NFP 01/01/13 NFP 31/12/ -846 - -846 396 152-3 -40 6-60 -79-476 OPERATING CASH FLOW +87 34-6 -43 47 0 2-49 -476-474 8-483 NFP 31/12/13 Delta Perimeter (1) NFP 01/01/14 Saving Shares Conv/Cap Incr. Disposals Acquisitions CAPEX Dividends (2) Others Operating Cash Flow NFP 31/12/14 22 (1) Figures were restated further to the adoption of the amendment to IFRS 10 and IFRS 11 related to the perimeter of consolidation (2) Includes non recurring items Cash flow representation as of management reporting
Focus on Q4 Cash Flow EUR million NFP 30/09/ NFP 31/12/ Q4-547 93-2 -10-26 17-476 OPERATING CASH FLOW +26 VS AP -515 NFP 30/09/14 14-1 -11-13 43 Disposals Acquisitions CAPEX (1) Others Operating Cash Flow -483 NFP 31/12/14 (1) Includes non recurring items 23 Cash flow representation as of management reporting
Agenda Highlights Market & Business Trends FY Results Outlook and Strategic Opportunities Business Units Back up 24
Outlook FY 2015 PROFITABILITY DELEVERAGING REVENUE vs Slight increase EFFICIENCIES Upgraded efficiencies target matched (220m in 3 years) FREE CASH FLOW Positive before Extraordinary items DEBT RATIO <3.5x EBITDA % (1) 9%+ EBIT Positive and sufficient to cover financial charges 25 (1) EBITDA excluding non-recurring items
Continuing focus on profitability and deleveraging EUR million Three years Plan -2105 Update Advertising Circulation/other ~ 1,500 Advertising Circulation/other 1,513 586 1,314 1,279 ~ 1,300 476 491 Revenue Revenue 927 838 788 EBITDA ex NR ~ 150 EBITDA ex NR 51 27 70 P P 2015 P 2012 2015E EBITDA Margin 2% 7% 10% EBITDA Margin 3% 2% 5.5% 9% Efficiencies 82 35 27 Efficiencies 92 72 56 Debt Ratio 4/4.5x Debt Ratio < 3.5x 26
Strategic opportunities: focus on News and Sports NEWS New competitive landscape (TV/Social Media players) RCS strong investments in power brands sustains leadership position through: AUDIENCE EXTENSION FURTHER VIDEO/MOBILE OFFER PAID CONTENT STRATEGY IMPROVED EFFICIENCY GAINS ENABLING B2B MARKETING News Sport ATL & BTL SOLUTIONS SPORTS Huge global audiences seeking community, content & engagement RCS uniquely placed to create a major specialist platform in European Sports building on: EDITORIAL LEADERSHIP EVENTS & FORMAT EXPERTISE DIGITAL KNOW-HOW ENABLING STRONG OFFLINE ADV MKT SHARE GROWING ONLINE/VIDEO POSITION UNIQUE BTL OFFERING STRONG DATA MONETIZATION STRONG GROWTH PROSPECTS INTERNATIONAL DEVELOPMENT ATTRACTIVE PARTNERSHIP POSSIBILITIES 27
Looking ahead: financial ambitions for 2018 Sustainable revenue growth Profitability aligned with main peers (15% EBITDA margin) Continuous deleveraging for a sustainable debt ratio Re-rating of the business and value creation 28
Agenda Highlights Market & Business Trends FY Results Outlook and Strategic Opportunities Business Units Back up 29
Media Italy P&L EUR million 4Q14 4Q13 YoY YoY Circulation 72.8 69.3 5.1% 287.8 298.3 (3.5%) Advertising 66.5 70.1 (5.1%) 219.5 234.3 (6.3%) Other 8.3 7.3 13.7% 24.6 24.4 0.8% advertising on-line 21.5% TOTAL REVENUE 147.6 146.7 0.6% 531.9 557.0 (4.5%) O/W add on 23.6 17.1 76.9 67.1 EBITDA ex NR Items 34.0 28.3 20.1% 61.5 38.9 58.1% Non Recurring Items (2.0) (2.1) (1.4) (59.9) EBITDA 32.0 26.2 22.1% 60.1 (21.0) >100% 30
Media Spain P&L EUR million 4Q14 4Q13 YoY YoY Circulation 38.4 43.0 (10.7%) 158.0 179.5 (12.0%) Advertising 51.3 42.9 19.6% 156.7 147.0 6.6% Other 11.3 12.5 (9.6%) 43.4 45.2 (4.0%) advertising on-line 25.0% TOTAL REVENUE 101.0 98.4 2.6% 358.1 371.7 (3.7%) O/W add on 1.0 2.2 2.5 13.5 EBITDA ex NR Items 22.1 14.6 51.4% 27.3 7.0 >100 Non Recurring Items (1.1) (3.1) (27.8) (18.0) EBITDA 21.0 11.5 82.6% (0.5) (11.0) ns 31
Books P&L EUR million (1) 4Q14 4Q13 YoY YoY (1) Fiction & non-fic. Italy 39.8 44.1 (9.8%) 108.5 124.0 (12.5%) Education 15.8 16.2 (2.5%) 86.2 91.2 (5.5%) Rizzoli International 10.0 11.5 (13.0%) 26.3 26.7 (1.5%) Other 1.6 0.0 ns 1.6 9.2 (82.6%) TOTAL REVENUE 67.2 71.8 (6.4%) 222.6 251.1 (11.4%) EBITDA ex NR Items 5.2 8.0 (35.0%) 9.3 8.8 5.7% Non Recurring Items (4.4) 0.6 (7.3) (5.0) EBITDA 0.8 8.6 (90.7%) 2.0 3.8 (47.4%) 32 (1) The Partworks Division were sold on August 1,. On December 11, the equity investment in Editions d Art Albert Skira was sold and on March 1, the lineof business La Tribuna was sold.
Advertising & Events P&L EUR million 4Q14 4Q13 YoY YoY Advertising and Events 91.0 88.4 2.9% 297.5 289.4 2.8% O/W RCS publishing 74.3 80.6 248.2 267.6 3rd party publishers 15.8 7.0 45.9 11.9 Sport Events 2.7 3.3 (18.2%) 48.0 41.0 17.1% TOTAL REVENUE 93.7 91.7 2.2% 345.5 330.4 4.6% EBITDA ex NR Items 1.4 (1.8) ns (0.6) (13.6) ns Non Recurring Items (0.3) (2.8) (1.1) (18.0) EBITDA 1.1 (4.6) ns (1.7) (31.6) ns 33
Disclaimer Investor Relations Department Federica De Medici +39 02 2584 5508 Federica.demedici@rcs.it Forward-looking Statements Statements contained in this document, particularly the ones regarding any RCS MediaGroup possible or assumed future performance, are or may be forward looking statements and in this respect they involve some risks and uncertainties. RCS MediaGroup actual results and developments may differ materially from the ones expressed or implied by the following statements depending on a variety of factors. Any reference to past performance of RCS MediaGroup shall not be taken as an indication of future performance. This communication does not constitute an offer or solicitation for the sale, purchase or acquisition of securities of any of the companies mentioned in any jurisdiction and is directed to professionals of the financial community. Roberto Bonalumi, the Manager responsible for drawing up the company s accounting statements, hereby declares, pursuant to article 154-bis, paragraph 2 of the Testo Unico della Finanza (Legislative Decree n. 58/1998), that the information contained in this presentation corresponds to those one contained in the group s documents and books accounting records. 34